December 17, 2005

I Wonder What Shawn Fanning Thinks of This?

Filed under: Corporate Outrage — Tom @ 6:18 pm

Banner ad found at yesterday:


GAO: Uncle Sam’s Financial Statements and Controls Can’t Be Relied on for 9th Straight Year; Media Not Interested

On Thursday, The Government Accountability Office (GAO) issued its report on their attempted audit of the United States Government’s financial statements. The GAO opened its Media Release (2-page PDF) with the following:

GAO Again Disclaims An Opinion on U.S. Government’s Financial Statements

For the ninth straight year, the U.S. Government Accountability Office (GAO) is unable to provide an opinion as to whether the consolidated financial statements of the U.S. government are presented fairly, in all material respects, in conformity with generally accepted accounting principles.

Comptroller General of the United States David M. Walker, who heads GAO, said material deficiencies in financial reporting and other matters in Fiscal Year 2005, most notably at the Department of Defense, “have resulted in conditions that prevent us from being able to render an opinion to the Congress and the American people.”

Near the end of the release is an evaluation of the quality of our government’s stewardship over our tax dollars and resources:

In its audit report, GAO concludes that the federal government did not maintain effective internal control over financial reporting and compliance. The audit report also outlines a number of material control weaknesses.

The Media Release also documents Mr. Walker’s grave concerns about the government’s ability to continue on its current course:

Furthermore, the federal government’s reported net operating cost, which included expenses incurred during the year, increased to $760 billion in fiscal year 2005 from $616 billion in fiscal year 2004. Second, the U.S. government’s total reported liabilities, net social insurance commitments and other fiscal exposures continue to grow and now total more than $46 trillion, representing close to four times current GDP and up from about $20 trillion or two times GDP in 2000. …… Given these and other factors, it seems clear that the nation’s current fiscal path is unsustainable and that tough choices by the President and the Congress are necessary in order to address the nation’s large and growing long-term fiscal imbalance.”

You would think that a report like this that documents the government’s failure to do what it expects any business to do for the ninth year running, and raises alarms about long-term tax and spending trends, would have been of interest to reporters across the political spectrum.

You would be wrong.

Google news searches done over the past 36 hours, the last at 2:15 ET Saturday afternoon, on “GAO United States government” (without the quotes, sorted by date), revealed a grand total of three relevant listings:

  • UPDATE: GAO Faults US Financial Reporting—Business Online, UK (original source found separately: MarketWatch, which also has the story here [free registration required])
  • GAO Faults US Financial Reporting–
  • GAO Faults US Financial Reporting– (Spain–story has moved and could not be found)

There has been no coverage by what is normally referred to as The Mainstream Media (NY Times, Washington Post, LA Times). On the “conservative” side, as a subscriber I searched The Wall Street Journal–nothing.

A month ago, when the European Union failed similarly with its financial statements and controls for the 11th straight year, European and worldwide coverage coverage was at least passable, including this howler of a headline in Australia: “11 years’ chaos for EU accounts.” The UK Guardian, AFP, Expatica, and others all at least gave it a mention (some links have moved or have gone behind paid subscription walls), though there was plenty of concern expressed about lack of reaction to the result.

Apparently no one has a stuck a microphone in front of spendaholoic congressmen to ask them if the fact that the government can’t reliably tell us what is going on with its finances bothers them. Conversely, no one has asked the fiscal hawks who want us to believe they are watching every penny for their reactions either.

So what explains the reluctance to report or inquire about this consistent failure of our government at the most fundamental level? Laziness? Belief that the public doesn’t care or is too dumb to comprehend the impact? The MEGO (My Eyes Glaze Over) effect any time something involving finance or numbers is brought up? Liberal reluctance to embarrass government bureaucrats or the past administration (when the current streak started)? Conservative reluctance to criticize “their” sitting president?

Whatever the reason(s), this comprehensive lack of accountability, and official and media nonchalance about it, are unacceptable, and scary. Where’s the outrage? How will things ever change?

(Cross-posted at

Related post:
Dec, 16 — Announcing the “We’re Out of Control, and Sarbanes Oxley Should Apply to Us” Winner for 2005

So Where Did the Idea for THIS Come From?

Filed under: OH-02 US House,Taxes & Government — Tom @ 2:24 pm


When things like this happen, it’s really hard to swallow the “conventional wisdom” that the person who inspired this is “haunted” (the headline in the print edition of the linked article included that word–a different headline is being used at the online link).

UPDATE: In what surely must be a coincidence (HT OpiniPundit):

For the second time in as many months, the House rejected calls for withdrawing U.S. troops from Iraq with a vote Friday that Democrats said was politically driven and designed by Republicans to limit debate on the war.

In a 279-109 vote, the GOP-controlled House approved a resolution saying the chamber is committed “to achieving victory in Iraq” and that setting an “artificial timetable” would be “fundamentally inconsistent with achieving victory.”

Democrats voted against the resolution by a roughly two-to-one margin, underlining splits within the party over alternatives to President Bush’s Iraq war policies. Thirty-four of them voted “present,” a rarely used option that signals neither support nor opposition.

So there’s near unanimity against cut-and-run (403-3 four weeks ago), and 64% for achieving victory (assuming all non-voters and “presents” get treated as no votes). Sounds like the debate over Iraq is over to me. Just win, baby.

And of course the 2nd District Congresswoman’s House floor speech had nothing, NOTHING to do with these results. (/sarcasm)

Passage of the Day: George Will on ANWR and Anti-Energy Environmentalists

Amen brother (link requires registration; HT’s Political Diary e-mail):

….. although there are active oil and gas wells in at least 36 U.S. wildlife refuges, stopping drilling in ANWR (Arctic National Wildlife Refuge) has become sacramental for environmentalists who speak about it the way Wordsworth wrote about the Lake Country.

….. But for many opponents of drilling in the refuge, the debate is only secondarily about energy and the environment. Rather, it is a disguised debate about elemental political matters.

For some people, environmentalism is collectivism in drag. Such people use environmental causes and rhetoric not to change the political climate for the purpose of environmental improvement. Rather, for them, changing the society’s politics is the end, and environmental policies are mere means to that end.

….. Therefore, one of the collectivists’ tactics is to produce scarcities, particularly of what makes modern society modern — the energy requisite for social dynamism and individual autonomy. Hence collectivists use environmentalism to advance a collectivizing energy policy. Focusing on one energy source at a time, they stress the environmental hazards of finding, developing, transporting, manufacturing or using oil, natural gas, coal or nuclear power.

A quarter of a century of this tactic applied to ANWR is about 24 years too many. If geologists were to decide that there were only three thimbles of oil beneath area 1002, there would still be something to be said for going down to get them, just to prove that this nation cannot be forever paralyzed by people wielding environmentalism as a cover for collectivism.

This Weekend’s Single Unanswered Question (121705): What Does “Peer Review” Mean?

Filed under: Corporate Outrage,Taxes & Government,TWUQs — Tom @ 7:26 am

Another installment in a nearly-regular series of mysteries and pseudo-mysteries (usually 3-4, but this time just one) this inquiring mind would like to have answers for:

QUESTION: Did this shake your faith in scientific reports and research like it shook mine?

It turns out that a major research paper relating to embryonic stem-cell research was faked:

Cloning pioneer to withdraw paper, doctor says

SEOUL (AP) — A doctor who provided human eggs for research by cloning pioneer Hwang Woo-suk said in a broadcast Thursday that the South Korean scientist agreed to withdraw a key research paper because most of the stem cells produced for the article were faked. (Related item: Independent probe sought).

Huh? I thought an “independent probe” is always done when major scientific findings are reported.

So let’s move to USAT’s “independent review” article linked above:

Science is at the center of this issue because important research papers are peer-reviewed and published in the prestigious journal.

….. In a letter released Tuesday by Science, eight prominent stem cell researchers — including Ian Wilmut, who cloned Dolly the sheep in 1997 — called for an independent verification of the Hwang lab’s cell-cloning feats.

Again, huh? Why the need for an “independent verification” if the paper was already “peer-reviewed”?

Mystery solved (HT Amy Ridenour)–”peer review” gives none of the assurance a layman would expect from the term (the excerpt concerns climate science, but blows open the fallacy in the general public’s understanding of all scientific “peer review”):

In business, “full, true and plain disclosure” is a control on stock promoters. While it may not always be successful, it gives an enforcement mechanism. There is no such standard in climate science. (or “science” in general–Ed.) ….. In fairness, the journals do not require authors to warrant full, true and plain disclosure and there is little guidance to such authors as to what is required reporting and what is not required.

I’ve found that scientists strongly resent any attempt to verify their results. One of the typical reactions is: don’t check our studies, do your own study. I don’t think that businesses like being checked either, but one of the preconditions of being allowed to operate is that they are checked. Many of the most highly paid professionals in our society – securities lawyers, auditors – earn much of their income simply by verifying other people’s results. Businesses developed checks and balances because other peoples’ money was involved, not because businessmen are more virtuous than academics.

Then there is this comment at the same post:

I don’t think that it’s practical for journal peer reviewers to check every piece of data and every calculation – nobody would ever do reviews. But people should realize that even “peer reviewed” journal articles are (in business terms) unaudited. It doesn’t mean that they are wrong; it only means that they are unaudited. The crunch comes if people rely on them as though they were audited.

So the next time you hear the term “peer-reviewed,” I would substitute these words: “passed the smell test (maybe, and if the person submitting the work is ethical and conducted his/her work conscientiously and honorably).”

Given the ever-larger dollars, very often tax dollars, that are based on the reliability of scientific work, standards must be raised, even if it costs money up-front (auditors, if you will) to raise them, and even if scientists’ egos are bruised in the process.

Maybe we as citizens should demand that the entire scientific community be brought under the heavy hand of Sarbanes Oxley.

Full Disclosure: I have recently posted on what I see as disparate media treatment between embryonic stem cell research and adult stem cell research (with the press reporting more favorably, and more often, on embryonic developments), and my personal belief that long-run success in using stem cells will come from the adult variety.

UPDATE: BizzyBlog links, you decide–”Cloning Doctor Finally Answers Critics — South Korean stem cell pioneer insists his groundbreaking research is still credible”

UPDATE 2, Dec. 26: What is probably the last word — “Stem cells in disgraced scientist’s paper did not exist: SKorean report”

Positivity: A Life-Saving Catch

Filed under: Positivity — Tom @ 7:07 am

The catch of a lifetime saved a baby’s life: